New business models, big opportunity - 2021 PLANNING Months into the pandemic, companies are revisiting goals and ways to achieve them. They have ...
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Months into the pandemic, companies are revisiting goals and
ways to achieve them. They have big plans on the horizon.
2021 PLANNING
Produced in association with New business
models, big
opportunity2 MIT Technology Review Insights
Key takeaways
1
Half a year into an economic recession and
government restrictions triggered by the
2020 coronavirus pandemic, organizations
are feeling optimistic and ready to move
ahead with innovative efforts to drive
business growth.
2 They’re not starting small. Responding to
a global survey, 80% of executives report
W
that their organizations are planning big
hen the pandemic threw the world moves, such as acquiring a new business
into disarray in spring 2020, most or divesting one, launching a new business
organizations responded by holding model, or implementing automation
on—barely, at times. Executives assessed companywide.
3
the impact on operations and dealt with
Numerous hurdles remain, including
the immediate emergency. Now businesses are ready to
frozen budgets, limited technologies or
move beyond resilience and recovery and capture growth.
skills, and fractured risk management
and compliance processes. But a
Certainly, corporate execs and finance professionals have combination of cloud-based and advanced
to focus on the future and take advantage of emerging technologies such as artificial intelligence
technology. “You have to evolve to succeed,” explains and machine learning gives finance teams
Scott Brown, senior vice president of finance at tech the power to guide business in the
distributor Mouser Electronics. “Whether it’s software, direction of success.
hardware or automation, we are investing in state-of-
the-art solutions and systems to help us work smarter
across all areas of the company.”
The journey from survive to thrive
The good news: Nearly everyone is feeling optimistic. The pandemic challenged every business in 2020. It
A worldwide survey of 297 business executives tested every element of organizations’ workflows and
conducted by MIT Technology Review Insights, in utterly changed their planning processes. But by autumn,
association with Oracle, shows that organizations are most executives had a handle on the situation. When they
ready to invest in innovative ideas to reinvigorate their spoke with MIT Technology Review Insights, they were
organizations. And they’re getting the work underway. busy designing strategic business plans for 2021. Among
About this report
Based on a combination of survey-based market research and in-depth executive
interviews, this report explores how organizations are rebuilding business in
the wake of the 2020 coronavirus pandemic. It is sponsored by Oracle, and the
views expressed within are those of MIT Technology Review Insights, which is
editorially independent.
• In November 2020, MIT • Respondents work in more •The survey was global, with • Respondents were asked
Technology Review Insights than a dozen industries. High 60% of respondents from the about strategic business
surveyed 297 executives— tech, at 20%, represented Americas, 27% from Europe, moves their organizations
primarily financial officers, the largest response group; the Middle East, and Africa, have made already in 2020
C-suite executives, and IT followed by financial services, and 13% from the Asia-Pacific or are planning in the next 36
leaders. at 15%; professional services, region, which comprises months, challenges they face
at 13%; and retail and Asia plus Australia and New in implementing such moves,
manufacturing, each at 8%. Zealand. and cloud-based technologies
they use to support their
finance organizations.MIT Technology Review Insights 3
them: major business model and technology adjustments
to help them achieve success.
Most execs are upbeat about their companies’ future.
Few are are postponing any sort of changes for the next 18
months or putting everything on hold until things shake out.
Overall, 47% expect their business to thrive in 2021, 36%
expect their organizations to transform, and only 12%
are hunkering down for a bleak year of survival. Herein,
“thrive” is distinguished as a successful continuation of an
existing business model. Take a manufacturer of
80
standing desks—there’s a good chance it’s selling a lot
%
more with the influx of employees now working from
home. Compare that to “transform,” or making significant
changes. That might include rethinking how a company
sells to customers or adding a new product line.
The 2021 objectives vary by company size to some degree.
Large companies—which in this report are organizations
with more than $1 billion in revenue—are more open to
of businesses are planning
transforming; in contrast, small and midsize companies strategic big moves, such
aim to thrive.
as acquisitions, divestitures,
Making big moves new business models, and
Perhaps it’s possible to cope in the short term by making
modest adjustments, such as renegotiating supply chain widespread automation.
contracts or reskilling displaced workers. But many
companies have used the pandemic as an opportunity
to reassess their business. Which parts can succeed major plans are underway but are not scheduled for
mostly as-is? Which need redirection? Which should deployment in the next 36 months.
be eliminated? Where are the untapped growth areas?
Whatever their conclusions, corporate executives are Big moves are more likely to be undertaken by larger
taking action. organizations; 87% of businesses with more than $1 billion
in revenue have plans, compared with 76% of smaller
These are rarely small changes. For instance, some in businesses. These large-scale changes are also more
the retail industry quickly found ways to keep business common in the Americas—84%, compared with roughly
buoyant while stores were closed—bolstering their three quarters with such plans in Europe, the Middle East,
e-commerce setups and making it easier for customers and Africa (EMEA), and Asia-Pacific.
to shop online or arrange for contactless pickup at a store.
The coffee industry made changes across its entire supply The companies with the most upbeat expectations—
chain, from harvest to the local coffee shop, despite the thrive or transform—have already taken the steps to make
uncertainty of demand. them a reality. Forty-four percent of the businesses that
expect to thrive in 2021 are planning a big move in the
In 2021, 80% of businesses surveyed are planning next three years; 39% of the companies orchestrating a
strategic big moves, such as acquisitions, divestitures, business transformation have already begun. In contrast,
new business models, and widespread automation. the companies that are just hanging on—surviving—
In fact, 39% have already made a “big move” in 2020. or hoping for a merger or to be acquired are taking
Just over a quarter of businesses, 27%, are contemplating fewer chances. Just 17% of the “survive 2021, I hope”
such plans in 2021. In some cases—14% overall—the organizations have big moves planned—presumably4 MIT Technology Review Insights
only the technology or operational changes that are Larger organizations that have big moves planned in
necessary to keep the doors open. 2021 also have their sights set on technology—they’re
most likely to make big tech investments (68%) or move
It’s easy to paint everything in terms of the pandemic more of their business to the cloud (60%).
these days, but the current crisis is exacerbating existing
problems, accelerating current trends, and requiring For many companies, technology adoption isn’t simply
more companywide collaboration to pull things off. For an enabler, it’s the backbone of their business. For
example, typically it takes about 10 years to develop a example, when manufacturer John Deere assesses
vaccine, points out Marc Horn, head of controlling for the quality of a tractor part built by an external supplier,
life science at MilliporeSigma, which supplies products the company is cognizant that the part will be used in
used by biopharmaceutical companies to manufacture geographies different from where it is sourced. Technology
covid-19 vaccine candidates. Horn’s role is supporting can automate relevant processes to help make fast
financial decisions on operational and strategic planning and accurate quality decisions and automate relevant
and execution. Given the crisis, the world looked to processes, says Ritu Raj, John Deere’s director for
develop a vaccine in just a year or so, and that has led enterprise engineering. It makes it possible to connect
MilliporeSigma to accelerate the process outside the lab. departments across the worldwide organization and
The company had to think about how it could help its get the part into production quickly. “If we make it an
customers in health care and allocate the financial automated process, the checks and balances are
wherewithal to accomplish and deliver those changes incorporated through technology, and teams have the
at a faster-than-usual pace. “And that means for us, information to make decisions very quickly,” he says.
internally, that you have to have constant interaction Without those technology systems, the entire process
with the obvious departments, but especially with supply can encounter missteps that create a delay.
chain and HR to establish new ways of working.”
Planning new business models
Many big moves by midsize organizations are tech- One way to respond to new business environments is to
related—half, for example, planned to ratchet up adopt or even invent new business models. Sometimes
technology investments, and more than a third are organizations have no choice, as movie theaters and the
adopting additional cloud services (see Figure 1). hotel industry have discovered. Savvy organizations are
$1B OR
UNDER $1B MORE ASIA-
REVENUE REVENUE PACIFIC EMEA AMERICAS ALL
Figure 1 INCREASE TECH
54% 68% 48% 61% 62% 60%
Big moves INVESTMENTS
FURTHER
planned for STRUCTURAL
CHANGES
43% 53% 48% 44% 48% 47%
2021 MOVE IT
FUNCTIONS 36% 60% 35% 46% 49% 46%
Big companies plan the TO CLOUD
biggest changes, including ACT ON MERGER/
ACQUISITION 32% 49% 28% 41% 41% 39%
technology overhauls and
business mergers. ADD A
19% 32% 24% 27% 23% 24%
SUBSIDIARY
Source: MIT Technology Review Insights
SPIN OFF A
survey of 297 executives, November 2020.
DIVISION 15% 16% 24% 10% 16% 16%
Respondents were asked to choose all
that apply. DIVEST
REAL ESTATE 11% 16% 10% 14% 13% 13%
DIVEST A
SUBSIDIARY 9% 10% 3% 10% 10% 9%MIT Technology Review Insights 5
always looking for new ways to make money; in the survey,
four out of five businesses with 2021 plans are evaluating
new business models. There are plenty of ways to do so, Figure 2
with cost reduction, sales process changes, and new
markets at the top of the list (see Figure 2).
New business models
In the wake of a disruptive year,
While these directions are meaningful to businesses organizations are planning to bring
worldwide, and of every size, there are a few highlights. costs down, launch new products
and services, and reassign resources.
• For the largest organizations, the business model
changes that are most appealing are those that drive
cost-reduction projects (70%, compared with 42%
among businesses with less than $1 billion in revenue).
DRIVE COST-REDUCTION
PROJECTS 53%
• The cost-reduction business model changes are rated
CHANGE HOW PRODUCTS/
SERVICES ARE SOLD 52%
50%
higher in the Asia-Pacific region (63%) than in EMEA
PIVOT TO
(56%) or the Americas (50%). Asia-Pacific businesses NEW MARKETS
were also more enthusiastic about changing how
products and services are sold (59%), compared
with 48% in EMEA.
REALLOCATE
RESOURCES 44%
• Less than half (46%) of the companies aiming for
“survival” in 2021 will see any big moves in the next 36
REPURPOSE AN
EXISTING PRODUCT 39%
months, new or ongoing—more than half of them are
finishing up projects they began before the pandemic.
LAUNCH NEW “AS A
SERVICE” MODEL 37%
35%
For the just-scraping-by organizations, big moves were PROVIDE IMPROVED
put on hold indefinitely. When they do entertain business CUSTOMER EXPERIENCES
model adjustments, the options are primarily those that
help them contain costs (55%). Source: MIT Technology Review Insights survey of 297 executives,
November 2020. Respondents were asked to choose all that apply.
There are also variations by industry. For example,
manufacturing companies can be laggards in regard to
new technology, says John Barcus, Oracle’s group vice
president of the industry strategy group, or they are
hampered by the innovator’s dilemma—walking the line
between serving current customer needs and investing
“The pandemic has accelerated
our enterprise thinking about making
big moves, given the opportunities
to further diversify our business
model and expand into new
technology areas.”
David Liu, Director, Corporate Strategy, Aptiv6 MIT Technology Review Insights
Figure 3
What’s hindering COMPANIES WITH LESS THAN $1B IN REVENUE
COMPANIES WITH $1B OR MORE IN REVENUE
big business moves ALL
BUDGET IS LIMITED
Budget constraints are the OR FROZEN
biggest obstacle for large DON’T HAVE THE RIGHT
and midsize organizations, SKILL SETS/PROCESSES
while security, compliance, FRAGMENTED SECURITY,
RISK, AND COMPLIANCE
and risk cause concerns
DON’T HAVE THE
for many. RIGHT TECHNOLOGY
INCORRECT DATA MODEL
OR STRUCTURE
LACK OF
EXECUTIVE BUY-IN 0% 100%
Source: MIT Technology Review Insights survey of 297 executives, November 2020
in technology that will serve future needs. “Many goal to strengthen our long-term position via potential
manufacturing companies have done the same thing for future investments, including acquisitions.”
many years. And their desire and hope is to do it the
same way into the future, believing, ‘It’s worked for me in Overcoming the obstacles
the past; it’ll work for me tomorrow.’” But, Barcus adds, Every plan has barriers to success. Not surprisingly, the
the current climate is forcing them to explore new biggest hurdle to organizational big moves is budgetary
options, such as adopting AI and automation. (39%) (see Figure 3). Other concerns include issues of
security, risk, and compliance (18%) and missing skill sets
“The key for us is to balance operational focus and and processes (17%).
long-term strategic thinking,” says David Liu, director of
corporate strategy at Aptiv, a global auto parts company. For any grand scheme, getting funding requires
The company is focused on trends in the automotive collaboration across the executive suite. Whoever the
business, such as safety, sustainability, and connected champion might be, business-changing projects require
technology. It is also paying attention to the big picture signoff from the CEO, chief information officer, the human
despite near-term market uncertainties and hiccups. resources executive, and of course the chief financial
“The pandemic has accelerated our enterprise thinking officer (CFO).
about making big moves, given the opportunities to
further diversify our business model and expand into That makes the finance executive the center of the
new technology areas,” says Liu. “Our $2 billion equity process—and the person orchestrating major changes.
issuance in June 2020 is a good example that shows our “I empower the organization,” says Mark Crowley, CFO of
“I empower the organization. I’m there to
make sure they have the resources to
do what they need to do; it runs a whole
lot more smoothly if we’re all in sync.”
Mark Crowley, Chief Financial Officer, Volante TechnologiesMIT Technology Review Insights 7
Volante Technologies, which sells cloud financial and
payment software. “I’m there to make sure that they have
the resources to do what they need to do; it runs a whole
lot more smoothly if we’re all in sync.”
Funding is less of a hurdle for large organizations with
more financial resources. In the survey, only 29% of
companies with more than $1 billion in revenue cite a
limited or frozen budget as the primary hurdle to making
a big move; yet 44% of midsize organizations are held
back for financial reasons.
Instead, larger organizations are concerned about
compliance and security (25%) and a lack of skills (21%)
to pull off their projects. That’s a realistic attitude.
According to a PwC survey, even before the pandemic,
three out of four CFOs were concerned about the skills
gap that could cripple their ability to thrive.1
Ongoing uncertainty brings out the need for a smarter
risk-management culture, particularly for worldwide
organizations embarking on big changes. As one example,
in the last four years, some of the escalation in trade wars
Figure 4
and tariffs introduced a level of risk in supply chains. That
has had an effect on several industries, such as the
Cloud-based
high-tech companies that typically outsource their technology and finance
manufacturing, points out Mike Saslavsky, Oracle’s senior Predictive analytics to improve operational
director of high-tech industry strategy. Those risks have efficiencies and market opportunities tops
made companies rethink where their parts are made— the agenda for most organizations.
and the parts’ components—and consider choosing
locations closer to their customers. “And that certainly got
amplified by the pandemic,” he adds. PROVIDE PREDICTIVE
ANALYTICS 58%
45%
Mergers and acquisitions are other types of big moves EVALUATE PRODUCT
that come with risks. Gradual organizational changes can OPPORTUNITIES
be managed manually—for example, adding two new
payroll clerks to the system and making sure they have
the right access, says Julie Lev, Oracle’s director of
AUTOMATE SECURITY
AND COMPLIANCE 42%
41%
product marketing for enterprise resource planning (ERP). CREATE A SINGLE SOURCE
But a corporate acquisition might bring in an influx of OF FINANCIAL DATA
people who need to work with the financials. Big moves
and disruptions can open a company’s ERP system up to
enormous risk, whether it’s honest human error or
AUTOMATE FINANCIAL
CLOSE AND REPORTING 39%
malicious activity such as fraud. CONNECT FINANCE,
SUPPLY CHAIN, AND HR 36%
“Automated and embedded risk management helps
insulate organizations and can help them confidently
manage a big move or disruption,” says Lev. She adds,
OPTIMIZE SCENARIO
MODELING 33%
Source: MIT Technology Review Insights survey of 297 executives,
“Controls remain in place for continued ERP security
November 2020. Respondents were asked to choose all that apply.
and compliance.”8 MIT Technology Review Insights
“This has been a time
for many organizations
to reflect, regroup, and
re-establish themselves by
rebuilding—a time to lead
forward versus look back.”
Marie Gould Harper,
Dean, School of Business,
American Public University System
AI and machine-learning technologies add other benefits: time doing repetitive tasks often subject to human error,
speed and a level of detection humans can’t match. thereby freeing up time “to do more analytical work that
“By having risk management built into your ERP and ultimately leads to better decision-making.”
financial processes, organizations have greater capability
to quickly realize and securely achieve their big-move An innovative future
objectives,” says Lev. So a business decision to add 5,000 In disruptive times, investing in and changing
new employees in other countries won’t irreparably harm business models can grow market share. That calls
the company’s bottom line, brand, and reputation or lead for companywide collaboration—business executives
to gaps in security and compliance. must work with financial executives, who in turn work
with their supply chain managers to understand where
The survey shows there’s no interoffice squabbling about vulnerabilities lie—and where changes make sense:
the importance of the cloud in supporting such plans. new product lines, for example, subscription services,
42% of respondents identify security and compliance as or digital platforms. Cloud technology is making it easier
apt candidates for cloud-based automation (see Figure 4). to accomplish these goals, and it’s empowering business
Other cloud technologies that appeal to business growth—made clear by the four-in-five business leaders
executives and finance leaders help drive predictive in the survey who are making big moves. Technology
analytics (58%) and analyze product and market can help plan and model for change; pivot business
opportunities (45%). models, resources, and talent toward the next growth
opportunity; and get new revenue streams running quickly.
Aptiv’s Liu says cloud-based applications help move
mergers and acquisitions forward, making the evaluation “This has been a time for many organizations to reflect,
and due diligence phases more transparent. In screening regroup, and re-establish themselves by rebuilding—
for potential targets, “AI-powered analytics can provide a time to lead forward versus look back,” says Marie
in-depth analysis of a target’s value drivers and risks.” Gould Harper, dean of the School of Business for the
American Public University System. “Yes, there is
Also high on the list of coveted cloud technologies is opportunity to look back at the past for lessons learned,
automation of finance processes. According to Oracle, but now is the time to focus on what the next step is.”
machine-learning algorithms, which learn from collected
data, can help companies automate common operations It’s an unsettled time, for sure. But it’s clear that most
as well as remain in compliance with financial and data organizations see it as an opportunity to rethink where
governance regulations in jurisdictions around the globe. they want to be and build their business to approach
As more functions such as financial close and financial new goals.
reporting are automated, employees will no longer spendMIT Technology Review Insights 9
“2021 planning: New business models, big opportunity” is an executive briefing paper by MIT Technology Review Insights.
We would like to thank all participants as well as the sponsor, Oracle. MIT Technology Review Insights has collected
and reported on all findings contained in this paper independently, regardless of participation or sponsorship. Jason
Sparapani and Laurel Ruma were the editors of this report, and Nicola Crepaldi was the publisher.
About MIT Technology Review Insights
MIT Technology Review Insights is the custom publishing division of MIT Technology Review, the world’s
longest-running technology magazine, backed by the world’s foremost technology institution—producing
live events and research on the leading technology and business challenges of the day. Insights conducts
qualitative and quantitative research and analysis in the US and abroad and publishes a wide variety of content,
including articles, reports, infographics, videos, and podcasts. And through its growing MIT Technology Review
Global Panel, Insights has unparalleled access to senior-level executives, innovators, and thought leaders
worldwide for surveys and in-depth interviews.
From the sponsor
Oracle offers suites of integrated applications plus secure, autonomous infrastructure in the Oracle Cloud.
For more information about Oracle (NYSE: ORCL), please visit us at www.oracle.com.
Reference
1 PwC US CFO Pulse Survey, PwC, June 15, 2020.
Illustrations
Cover art and spot illustrations created by Chandra Tallman with icons by The Noun Project.
While every effort has been taken to verify the accuracy of this information, MIT Technology Review Insights cannot accept any responsibility or liability for reliance on any person
in this report or any of the information, opinions, or conclusions set out in this report.
© Copyright MIT Technology Review Insights, 2021. All rights reserved.MIT Technology Review Insights www.technologyreview.com @techreview @mit_insights insights@technologyreview.com
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